MonthApril 2009

Earlier today Ben Goldacre tweeted: “Treat your dog for separation anxiety with a pill: amazingly this is not a spoof” – and a link to Reconcile, aka fluoxetine hydrochloride, which “helps manage separation anxiety”.

This though rang a loud bell with me. I’d written about it ages ago, and said so. Looked it up on the database I keep on my machine of all the stories that I wrote at the Indie. Oh yes, there it is, back in April 1998.

It is on the web, but the version on Findarticles seems to have mated at some stage with something about Northern Ireland – not to any good effect.

So here’s the original article that I wrote and which appeared in The Independent on April 16, 1998. Enjoy.

by Charles Arthur, Science and Technology Editor

With unhappy adults delighted by Prozac and hyperactive children calmed by Ritalin, drugs companies have discovered a new sector in need of pharmacological help to get through the day: dogs.

With fewer dogs actually working, and more and more people leaving them behind while they go off to work, a growing number (of the animals) are believed to suffer from “separation anxiety” – a psychological fear that they have been abandoned.

But since most dogs have problems with conventional psychiatric treatment – they find talking difficult, and are forbidden from lying on the couch – the Swiss pharmaceuticals company Novartis has stepped in.

Yesterday after a decade of effort the company received Europe-wide approval for a drug to treat canine separation anxiety – a problem that it claims affects up to 15 per cent of dogs of all breeds. Some vets say the problem has afflicted the animals since humans first domesticated wolves tens of thousands of years ago, though it has only been formally recognised for about 20 years.

“It might sound strange that dogs would suffer from anxiety,” commented Beverley Cuddy, managing editor of Dogs Today magazine yesterday. “But a dog is a pack animal. If you keep a single dog it regards you as its ‘pack’. Then it gets very upset when your routine changes – say if you start going to work. The dog doesn’t feel able to cope on its own and becomes terrified at being alone.” Such dogs will howl, chew furniture, soil the house and even mutilate themselves.

Novartis’s solution is twofold: a drug treatment lasting between 60 and 90 days, costing about 40 pence per day; and behavioural treatment, which is free (but comes with the drug). With 6.5 million dogs in the UK alone, the potential market is huge.

Chemically the drug, named Clomicalm, works in exactly the same way as Prozac: it sustains high brain levels of serotonin – the neurotransmitter associated with a “happy” state of mind. “The advantage is that it makes the dog more accessible to behavioural treatment,” said the spokesman. “The owner should have guidelines and rules for how they treat the dog before and after they arrive home.”

Ms Cuddy said, “This isn’t a miracle drug – the main problem tends not to be the dog, but the owner, whose lifestyle perhaps doesn’t support a pet.”

Are these viewer retention assumptions valid? Granted, they come from the top of my head. If you disagree, make your own assumptions; the math is simple. We don’t have a lot of real-world before-and-after figures from news sites that have imposed fees. But we know, for example, that the New York Times’s 2005-2007 Times Select experiment drew 227,000 paying customers at an average of about $3.70 a month (based on reported revenue of $10 million a year), at a time when the Times’s free content was drawing 13 million unique visitors a month — a conversion rate of less than 2 percent. Or consider that the Wall Street Journal has about a million paying subscribers at $8.66 a month, versus 14 million monthly UVs at the free New York Times site. Print circulation for the two are roughly equivalent, but the Journal’s fee cuts its online audience to just 7 percent of the Times’s.

Based on this, retention rates as high as those I’ve modeled don’t look attainable, and retention high enough to increase net revenue is plainly not in the cards. (To get a net gain at a seemingly reasonable $5 a month rate, retention would have to be about 45 percent.)

A simple tollbooth approach at any price cuts out the vast majority of the audience, and would mean that newspapers were retrenching to print — saying in effect, “If you want our news online, it’s there, just pay the fee, but we’re no longer investing much energy in developing our sites, because there’s no money on that side of the fence.” A newspaper industry retrenchment to print would mean a withdrawal from competing online. The game would be to squeeze the remaining profits out of print while the clock runs out; while readers continue to migrate online, now to non-newspaper online-only sources; and advertisers follow the audience to the Web.

And then you do the maths.. we do need to see some better modelling on this. But he has a good case.

It is tempting, but too easy, to say the problems of newspapers are their own fault. True enough, the industry missed a whole armada of boats. If newspapers had been smarter, or moved faster, they might have kept the classified ads. They might have invented social networking. But that’s all hindsight. I didn’t think of these things, nor did you. Judging from Tribune Co., for which I once worked, the typical newspaper executive is a bear of little brain. Until recently, little brain was needed. Even now, to say the newspaper industry has no problems that a busload of geniuses couldn’t solve is essentially saying that the industry’s problems are insoluable. Or at least insoluable without help.

Insoluable? When did the Washington Post dispense with subs or a dictionary? The trouble with this article, though, is that it’s saying “there will be news after newspapers”. I think we’ve heard that.

For the first time since the 1930s, millions of American households are financially ruined. Families that two years ago enjoyed wealth in stocks and in their homes now have neither. Their 401(k)s have fallen by half, their mortgages are a burden, and their homes are an albatross. For many the best strategy is to mail the keys to the bank. This practically assures that excess supply and collapsed prices in housing will continue for years. Apart from cash — protected by deposit insurance and now desperately being conserved — the American middle class finds today that its major source of wealth is the implicit value of Social Security and Medicare — illiquid and intangible but real and inalienable in a way that home and equity values are not. And so it will remain, as long as future benefits are not cut.

US social security and health care are what they really have? Scary. Oh, and the author of the piece? James K Galbraith. You may have heard of his father, John?

Rands In Repose: The Makers of ThingsHow do you sink the foundations of a bridge underwater without submarines? You build a giant watertight box. Simply terrifying and amazing at once. Rands’s point though is about how you need to think the impossible to enable enormous change – like we need now in all sorts of industries

Which brings us to the core issue for new content creation – artists may starve in garrets for art, but they still starve. Others just exit and do something else, The main reason that Freeconomics has survived to date is that copying other people’s stuff is the lowest form of content creation going. Problem is, as YouTube is finding, its hard to attract paying customers or advertisers to such content. Without significant Google subsidy, YouTube would collapse in months.

So where does that leave us?

Simple – Freemium will work in some cases, there is about $50bn for Ads to subsidise stuff (it will grow, but not rapidly in recessionary times as Ad spend is tied to GDP) and there are some last pools of risk capital left among the rocks.

But that is not going to fund Teh InterWebz. In Google we (may) trust, but for many of the others we’ll be paying cash.

Alan Patrick (aka @freecloud) on how the Free model is in collapse. Hey, isn’t everything these days? And how many of these Web 2.0 companies really are self-supporting, outside of V(enture) C(apital) money?